Pakistan signs $3bn deposit agreement with Saudi Arabia

Karachi: State Bank of Pakistan (SBP) on Monday signed an agreement for a deposit of $3 billion from Saudi Fund for Development (SFD).

The State Bank of Pakistan issued a statement regarding the agreement, which stated that a deposit agreement between the Kingdom of Saudi Arabia, represented by the Saudi Fund for Development (SFD), and the Government of the Islamic Republic of Pakistan, represented by the State Bank of Pakistan (SBP), was signed on Monday by the Chief Executive Officer of SFD, H.E. Sultan Bin AbdulRahman Al-Marshad and the Governor SBP, Dr. Reza Baqir at the State Bank of Pakistan in Karachi, Pakistan.

Under this deposit agreement, SFD shall place a deposit of USD 3.0 billion with SBP.

The deposit amount under the agreement shall become part of SBP’s Foreign Exchange Reserves. It will help support Pakistan’s foreign currency reservesand contribute towards resolving the adverse effects of the COVID-19 pandemic.

The overall financial support from the Saudi government, along with over $1 billion tranches from International Monetary Fund (IMF), will give a cushion to foreign exchange reserves of the country, which witnessed consistent outflows of the Dollar on account of payment of debt services.

The SBP said that the deposit agreement reflects the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and will further augment the economic ties between the two brotherly countries.